TD just downgraded its Ontario housing market forecast. Again.

And if you're a homeowner hoping for a big price rebound, you might want to make that coffee a double.

Ontario home prices are forecast to fall 2.6% in 2026, followed by a rather underwhelming 0.6% increase in 2027. Not exactly the comeback some sellers were hoping for.

But here's where things get interesting.

TD expects Ontario to lead the entire country in home sales growth next year while finishing dead last in price growth.

More buyers. More sales. Barely any price increases.

How does that work?

It turns out the answer says quite a bit about who's holding the negotiating power in today's housing market.

TD's Ontario Housing Market Forecast: The Numbers

Let's start with the bigger picture.

According to TD Economics' provincial housing outlook released at the end of September, Canadian home sales are expected to decline approximately 5% in 2026.

And TD doesn't expect the market to recover all that lost ground in 2027.

National average home prices are forecast to remain relatively flat this year, with growth of less than 2% next year.

Remember that spring housing rebound everyone was waiting for?

It showed up, waved hello, and apparently left early.

National home sales actually declined in August for the first time in six months.

So why did TD lower its expectations?

Two major reasons: borrowing costs and economic uncertainty.

Don't Count on Interest Rates Saving the Day

Borrowing became more expensive over the summer, and TD isn't expecting much relief anytime soon.

Its base-case forecast has the Bank of Canada holding its policy rate steady through 2027.

No additional cuts. Just holding steady.

Other banks have even suggested that policy rates could increase rather than remain unchanged.

So if your entire real estate strategy involves waiting for interest rates to come riding to the rescue, TD's forecast suggests you might want to bring a very long book.

There's also the ongoing trade dispute with the United States.

TD has downgraded its employment outlook as trade tensions have escalated, adding another layer of uncertainty for Canadian households.

And Ontario is particularly exposed because of its automotive, steel and manufacturing industries.

Why Ontario Buyers Have So Much Negotiating Power

Here's one number that explains a lot about Ontario's current housing market.

42%.

That's Ontario's sales-to-new-listings ratio from August.

In simple terms, for every 100 new homes listed, approximately 42 homes sold across the province.

Historically, that ratio has been closer to 57%.

That's a pretty significant difference.

It means new listings are arriving faster than buyers are purchasing properties.

And when that happens, sellers face more competition while buyers generally gain more negotiating power.

British Columbia is experiencing challenges too, but compared with its own historical averages, Ontario's market is even weaker.

Of course, that 42% figure is a provincial average. It doesn't mean exactly 42 out of every 100 homes on your street will sell.

Every neighbourhood and property type behaves differently.

But the broader message is clear: buyers have more choices, and sellers can't necessarily rely on the same strategies that worked when inventory was scarce.

There's Another Change Happening: Population Growth

For years, one of the biggest arguments supporting rising Ontario home prices was straightforward.

More people moving here. Not enough housing. Prices keep climbing.

It was practically the unofficial slogan of the real estate market.

But TD expects weaker population growth to hold back Ontario's price gains.

Slower population growth means less additional demand from new households than the market had previously been accustomed to.

That doesn't automatically mean home prices collapse.

It does mean the old assumption that prices will always rise deserves a closer look.

Ontario Could Lead Canada in Home Sales and Still Have the Weakest Prices

Now for the most surprising part of TD's forecast.

In 2027, Ontario home sales are projected to increase 7.4%.

That's the strongest forecast sales growth of any province in Canada.

First place!

But average home prices are expected to rise just 0.6%, the weakest provincial price growth in TD's outlook.

First in sales growth. Last in price growth.

That's quite the combination.

So how can sales jump while prices barely move?

TD points to pent-up demand.

Many buyers have been sitting on the sidelines, waiting for conditions that make them comfortable entering the market again.

As those buyers return, sales activity could improve.

But there's a catch.

Ontario already has a substantial amount of housing inventory available.

Returning buyers may simply begin purchasing homes from that existing supply rather than competing aggressively for a limited number of listings.

Think of a restaurant with a great chef and too many empty tables.

Business starts improving. More customers come through the door. But nobody's raising the menu prices just yet.

That's essentially the recovery TD is describing.

Sales recover first. Inventory gets absorbed next. Prices respond later.

It's a very different picture from previous rebounds when returning buyers quickly found themselves competing in bidding wars.

Could Ontario Home Prices Stay Flat Until 2028?

Here's where the numbers become especially interesting for homeowners.

TD's Ontario price projections discussed in the video are:

• 2026: Average home prices decline 2.6%.
• 2027: Average prices increase 0.6%.
• 2028: Average prices increase 2.8%.

Put those three years together, and Ontario's average home price would finish 2028 less than 1% above where it started in 2026.

Three years. Almost no overall price growth.

And that's before accounting for inflation.

After inflation, a home's value could actually be lower in real terms.

Now, before anyone starts stress-eating an entire box of Timbits, remember something important.

These are forecasts, not guarantees.

Economic conditions change. Interest rate expectations change. Trade developments can shift the outlook.

Even TD acknowledges that its projections are subject to uncertainty.

Still, these forecasts matter because buyers, sellers and homeowners may use them when deciding what to do next.

Could Ontario's Economy Improve?

There is some potential encouragement on the economic side.

BMO's economic outlook discussed in the video forecasts Ontario economic growth of 0.8% in 2026, improving to 2.2% in 2027.

That would represent a meaningful improvement, with next year's growth exceeding the national average.

BMO expects some pressure from trade uncertainty to ease.

If that improvement translates into stronger employment and greater job security, it could help restore buyer confidence.

But with trade conditions remaining unpredictable, the outlook can certainly change.

What About the Rest of Canada's Housing Market?

Ontario isn't the only province facing a challenging housing outlook.

TD expects Prince Edward Island home sales to decline approximately 11% in 2026, the largest projected drop in the country.

Alberta is also forecast to experience a sales decline of more than 9%, despite rising oil prices helping boost provincial incomes.

And then there's Atlantic Canada.

Since February 2020, average Canadian home prices have increased approximately 30%.

But look at these numbers:

• New Brunswick: Average home prices increased approximately 87%.
• Nova Scotia: Average home prices increased approximately 85%.
• Canada overall: Average home prices increased approximately 30%.

That's an enormous difference.

Meanwhile, Ontario and British Columbia, two of Canada's least affordable housing markets, are the provinces TD expects to experience price declines.

It's a reminder that housing markets across Canada don't all move together.

And affordability matters.

When prices stretch too far beyond what buyers can comfortably afford, something eventually has to adjust.

In Ontario and British Columbia, TD expects home prices to absorb some of that pressure.

What Does TD's Forecast Mean If You're Buying or Selling?

Here's where the forecast becomes more than a collection of percentages.

Because whether you're buying, selling, upsizing or downsizing, the numbers mean different things depending on your situation.

If You're Selling

Pricing matters enormously in a market where buyers have plenty of alternatives.

And here's something sellers sometimes underestimate.

An overpriced property doesn't always attract an offer that can be negotiated down.

Sometimes buyers simply ignore it.

That's why understanding what comparable homes have actually sold for is so important.

Not what sellers hoped to get. Not what their neighbours are asking.

What buyers actually paid.

If You're Buying

Buyers may have negotiating power they haven't experienced in years.

More inventory can mean more choice, more time to evaluate properties and greater opportunity to negotiate terms.

Conditions, inspections and timelines are all worth considering carefully.

Having leverage doesn't mean every seller will accept every request. But it does mean buyers may have more room to make thoughtful decisions.

If You're Upsizing

This is an interesting one.

Yes, you might sell your current home for less than you would have during a stronger market.

But you're also purchasing your next home in that same softer market.

And the difference between your selling price and your purchase price may actually be smaller than it was during the market's peak.

That's the number worth focusing on.

Not just what your current home sells for, but what it costs to make the entire move.

If You're Downsizing

Here's a question worth considering.

If you're living in a home that's larger than you need, is waiting another three years for prices to recover worth three more years of carrying that property?

There's no universal answer.

But it's worth weighing the ongoing costs of your current home against the potential benefits of moving sooner.

Three Questions to Ask Before Making Your Next Move

Before deciding whether to buy, sell or wait, consider these three questions.

1. What Have Comparable Homes Actually Sold For?

Look at similar properties sold within the last 90 days.

Not just their asking prices.

Listing prices are wishes. Sold prices are facts.

Those actual transactions provide a more useful picture of what buyers are currently willing to pay.

2. How Long Are Similar Properties Taking to Sell?

If comparable homes are sitting on the market for weeks rather than days, your pricing and timeline should reflect that reality.

Understanding how quickly properties are selling can help set more realistic expectations.

3. Does Your Plan Still Work If Prices Stay Flat?

This might be the most important question of all.

If Ontario home prices barely increase over the next three years, would your real estate plans still make sense?

If your strategy depends entirely on a major price rebound, it may be worth reconsidering your assumptions.

A good plan should account for the possibility that the market doesn't behave exactly as hoped.

A Slower Housing Market Doesn't Mean a Broken One

Here's the part of TD's forecast that deserves just as much attention as the price declines.

TD is not forecasting a housing market crash.

Its projections show modest but positive quarterly price growth throughout 2027, alongside a broader recovery in Canadian home sales.

Ontario's buyer-friendly conditions could gradually rebalance as more purchasers return and existing inventory gets absorbed.

It just may not happen as quickly as some people would like.

And that's okay.

Because slow doesn't automatically mean broken.

It means buyers and sellers may need to approach the market differently than they did when prices were rising rapidly.

So whether you're thinking about buying, selling, upsizing, downsizing or simply waiting things out, don't make your entire decision based on a headline forecast.

Look at your local market, your type of property and the numbers that actually affect your move.

And remember: you don't need a booming market to make a smart real estate decision.